NET INCOME MARGINS ARE SOARING
By Tom Stieghorst
Cruise lines record best profits
in a decade as they head into ’ 18
The cruise industry is closing out
a year of extraordinary earnings,
with several of the biggest companies enjoying their best profit margins in a decade.
Two of the three publicly traded cruise
companies, Royal Caribbean Cruises Ltd.
(RCCL) and Norwegian Cruise Line Holdings (NCLH), will have to wait until the end
of the year to close the books on 2017.
But Carnival Corp., whose fiscal year ends
Nov. 30, is already tallying the results and expects to report year-end results on Dec. 19.
A consensus of financial analysts who
follow cruise lines is that Carnival will earn
about $2.69 billion in a year during which a
good economy, a longer booking curve, the
right mix of deployment and a near absence
of geopolitical or self-inflicted disasters have
cruise bookings hitting on all cylinders.
Through the first nine months of its fiscal
year, Carnival earned $2.06 billion on revenue of $13.3 billion, a net profit margin of
Adding back the $392 million it subtracted
from profits this year to write-down the assets of its inefficient P&O Australia brand
would make those margins higher, probably
more than the 16.9% recorded in 2016.
To find similar levels of profitability for
Carnival, investors would have to go back
to 2007, before the housing-related financial
meltdown, when net income hit $2.4 billion
and profit margins were 18.4%
Carnival Corp. CEO Arnold Donald, in
a conference call with analysts in September, said that despite that month’s spate of
In Havana, a historic gathering pairs
By Tom Stieghorst
cruise CEOs with government officials
Cruise lines are laying the groundwork for
further expansion into Cuba now that the
rules governing U.S. tourism to the island
have been revised and clarified by the Trump
CEOs from seven cruise companies met in
Havana on Nov. 27 with Cuban government
officials, along with representatives from
CLIA and the Florida-Caribbean Cruise Association, to exchange viewpoints.
It was the first time so many cruise
CEOs had gathered in Havana, according
to Charles A. Robertson, who attended the
meeting as chairman and CEO of Pearl Seas
Cruises, which sails to Cuba from Fort Lauderdale.
“It was very positive,” he said. “The Cuban
government did a great job. I think the whole
relationship with the cruise industry is ma-
turing very nicely.”
Cruise lines were left largely unscathed
when the new rules for U.S. trade and travel to
Cuba were announced a month ago. Hotels in
Havana that are owned or operated by entities
with ties to the Cuban military were made off
limits, crimping land tourism. The Trump ad-
ministration also blocked individual travel to
Cuba, restricting visits to groups in itineraries
designated as people-to-people exchanges.
MSC Cruises CEO Gianni Onorato, who
also attended the Nov. 27 summit, said Cuban officials asked the group to back an
easing of President Trump’s restrictions.
See CUBA on Page 34
See PROFITS on Page 36
It was a banner year for much of the travel industry. Yet
several challenges — from President Trump’s policies and
rhetoric to hurricanes and wildfires — tested hoteliers,
airlines, agents and tour operators.
BY JOHANNA JAINCHILL PAGE 14
This millennial hopes to rally the industry behind
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